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Friday, November 6, 2015

Tata Steel, the Indian-owned steelmaker that operates sites in Rotherham and Sheffield, has reported a loss for European operations in its latest financial results due to worsening market conditions, primarily in the UK.

The company used its latest financial results again to warn that continuing cheap imports risk undermining Europe's steel industry and that uncompetitive energy costs and the strength of sterling are hurting its UK operations.

Turnover for the three months to September 30, fell to £1.7 billion from £2 billion in the same period in the previous year. This resulted in a pre-tax operational loss of around £24m, adding to the £13m loss in the previous quarter.

A statement from Tata Steel said: "Market conditions in Europe, primarily in the UK significantly worsened in the quarter as UK continues to witness surge in imports and declining competitiveness of the manufacturing sector due to weak industrial demand, strengthening of the sterling and adverse regulatory and business conditions."

The company recently confirmed proposals affecting 1,200 jobs, mainly in Scunthorpe and Scotland. It follows the announcement in July of a restructure of its speciality and bar business to focus on high-value markets such as aerospace - a move that has put 720 jobs are at risk, many in Rotherham.

AdvertisementDr Karl-Ulrich Köhler, MD & CEO of Tata Steel in Europe, said: "Our operating result has turned negative this year, reflecting the huge challenges the global steel industry is facing. In the UK these issues have been compounded by unhelpful exchange rates and regulatory costs that are destroying competitiveness.

"We have made three restructuring announcements in the UK since July leading to reduced volume and costs. We are working with the UK government to urgently secure a more competitive trade and regulatory environment and we will support our employees affected by restructuring. We are also continuing to assess all the strategic options for our Long Products business.

"Across Europe we are calling on governments to ensure the European Commission upholds international trade rules firmly and more speedily. Surging volumes of dumped imports, including from countries that subsidise their steelmakers, are massively distorting competition.

"But we will not let this challenging marketplace divert us from our objective of making advances for our customers by developing higher-value products which give them a competitive edge. We will continue to optimise our Strip Products business and look to realise the world-class potential and strategic locational advantages at our IJmuiden facility."

Over 2,000 people are employed by the company in South Yorkshire where sites like Stocksbridge in Sheffield and Aldwarke in Rotherham, focus on exceptional high-value products and sectors.

Despite the performance in Europe, the combined group maintained profits. The Indian steelmaker also took another £900m write-down on its European division.